Arthur Hayes: If the Federal Reserve intervenes in Japanese government bonds, Bitcoin is expected to break free from sideways trading
January 27 News, Arthur Hayes stated that if the Federal Reserve steps in to support the weak Japanese government bond market, Bitcoin could break free from its long-term sideways trading. Hayes proposed that the Fed might intervene by printing money to stabilize the yen and Japanese government bonds, which could potentially provide new upward momentum for Bitcoin.
Japan is facing dual pressures: yen depreciation alongside rising government bond yields, indicating a loss of market confidence. Hayes pointed out that this situation might force the Bank of Japan or the Federal Reserve to intervene, and the US could also be affected, as Japanese investors might sell US Treasuries to buy higher-yielding Japanese government bonds.
Hayes explained that the Fed might collaborate with banks like JPMorgan to establish dollar reserves, then sell dollars to buy yen, and use the yen to purchase Japanese government bonds, thereby lowering yields. This operation would expand the Fed’s foreign currency-denominated assets and liabilities, creating potential liquidity that could indirectly benefit the Bitcoin market. Hayes emphasized that he would not increase risk exposure until central bank intervention is confirmed.
Meanwhile, the US dollar index fell to 95.6 on Tuesday, the lowest since January 2022. Despite the dollar declining about 10% over the past year, Trump insisted during a speech in Iowa that the dollar is “performing strongly,” criticizing the long-term depreciation of the yen and the renminbi for affecting international competitiveness. Hayes believes that the volatility of the dollar relative to the yen and Japanese bond markets is closely linked, and Bitcoin’s price trend may adjust accordingly.
Analysts point out that if the Fed prints money to intervene in the Japanese market, it could not only push up the yen but also create new market capital flows into Bitcoin, injecting vitality into its long-term sideways trend. Monitoring changes in the Fed’s H.4.1 balance sheet will be a key indicator for assessing potential market stimulation.
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